Real Estate Updates

CoreLogic: falling shadow inventories foreshadow rise in prices

October 10, 2012 By EmmanuelFonte Leave a Comment

Reporting for July (the most recent month available), CoreLogic notes that shadow inventory levels are falling across the board, but notes that this is an indicator that housing prices will continue rising.

Shadow inventories on the decline

According to information provider, CoreLogic, the current residential shadow inventory as of July 2012 fell to 2.3 million units, representing a supply of six months, and a 10.2 percent drop from July 2011, when shadow inventory stood at 2.6 million units (approximately the same level the country was experiencing in March 2009).

CoreLogic notes that as of July, the flow of new seriously delinquent (90 days or more) loans into the shadow inventory has been roughly offset by the equal volume of distressed (short and real estate owned) sales.

corelogic figure 1 CoreLogic: falling shadow inventories foreshadow rise in prices

“Yet another hopeful sign”

“Broadly speaking, the shadow inventory continued to shrink in July,” said Anand Nallathambi, president and CEO of CoreLogic. “The reduction is being driven by a variety of resolution approaches. This is yet another hopeful sign that the housing market is slowly healing.”

“The decline in shadow inventory has recently moderated reflecting the lower outflow of distressed sales over the past year,” said Dr. Mark Fleming, Chief Economist for CoreLogic. “While a lower outflow of distressed sales helps alleviate downward home price pressure, long foreclosure timelines in some parts of the country causes these pools of shadow inventory to remain in limbo for an extended period of time.”

corelogic figure 2 CoreLogic: falling shadow inventories foreshadow rise in prices

Digging deeper in to the six months’ supply

As of July 2012, CoreLogic reports that the shadow inventory fell to 2.3 million units, or six-months’ supply, and represented just over three-fourths of the 2.7 million properties currently seriously delinquent, in foreclosure, or in REO.

Of those 2.3 million units, 1.0 million units are seriously delinquent (2.9 months’ supply), fully 900,000 are in some stage of foreclosure (2.5-months’ supply) and 345,000 are already in REO (1.0-months’ supply).

The dollar volume of shadow inventory was $382 billion as of July 2012, down from $397 billion a year ago and $385 billion last month.

corelogic figure 3 CoreLogic: falling shadow inventories foreshadow rise in prices

Regional performances varied

Serious delinquencies, which CoreLogic calls “the main driver of the shadow inventory,” declined the most from April 2012 to July 2012 in Arizona (3.2 percent), Pennsylvania (2.8 percent), New Jersey (2.3 percent), Delaware (2.2 percent), and Maine (2.2 percent).

As of July 2012, Florida, California, Illinois, New York and New Jersey make up 45 percent of all distressed properties in the country.

Note: as of this month, CoreLogic has adjusted the methodology for this report, which they say will improve accuracy. Full details here.

Source: Tara Steele in Economy, News – October 9, 2012

Filed Under: Blog, Economy, Housing Market, real estate financing, Real Estate Updates Tagged With: foreclosures, shadow inventory, shadow market

Reluctant Sellers Hold Up the Market?

October 4, 2012 By EmmanuelFonte Leave a Comment

While home prices are making gains in many markets, many home owners continue to wait for home prices go up even further before wanting to list their homes for sale, Inman News reports. As such, inventory levels have been tightly constrained in many markets, resulting in shortages of available for-sale listings.

Negative equity is mostly at play in causing many would-be sellers to wait out the market longer. About 10.8 million home owners were underwater at the end of June, CoreLogic reports. Negative equity often delays home owners from selling because they need the down payment on their current home to purchase another home.

"Many [would-be sellers] are waiting for prices to increase more before they can sell, and some sellers are keeping their current homes as a rental investment and buying without selling," Tom Avent, a broker-owner at Tom Avent Real Estate in Fresno, Calif., told Inman News.

Eight out of 10 would-be sellers recently surveyed say they believe they can get a higher price for their home if they wait one to two years to sell, according to a survey of 816 home owners conducted by Redfin. In the survey, only 13 percent said that now is a good time to sell.

"The sellers want to sell high and buy the home for prices that were available six months ago,” Andrea Harrington, an agent at EWM Realty International in Fort Lauderdale, Fla., told Inman News. “When they realize the entire market trends up, they rethink their plans to sell since it may not be as economical."

Facing inventory shortages, some real estate professionals are even reaching out to home owners who are sitting on the fence about putting their home on the market.

"Many sellers are still not aware of how strong our market is," Charles Roberts, co-owner of Your Castle Real Estate who serves as a director on the Denver Board of REALTORS^®, told Inman News. "They still think it’s a bad market to sell. Our job is to inform them about the market and explain to them that with a rising market, it has become a strong seller’s market and to walk through their options."

In many areas, it’s a seller’s market right now, and that surprises many home owners, adds Jason Lopez, a broker at Atlantic & Pacific Real Estate in the San Diego area.

“Now it doesn’t mean prices are skyrocketing like past cycles, but with the chance of multiple offers, it makes the process more appealing,” Lopez told Inman News.

Source: “Fence-Sitters in No Hurry to Sell,” Inman News

Filed Under: Blog, Housing Market, Real Estate Updates

Morgan Stanley Makes Bold Prediction on Housing

October 4, 2012 By EmmanuelFonte Leave a Comment

Investment firm Morgan Stanley has high hopes for the housing market’s recovery this year and next.

"We expect to see 2012 end with an increase of 7 to 9 percent for the year in aggregate home prices after considering seasonality effects for the remainder of the year, with the possibility of a 10 to 12 percent increase on the bullish side and a 4 to 6 percent increase as the bear case," according to Morgan Stanley analysts in its latest Housing Markets Insight report. "We view the bear case outcome to be relatively less likely."

Morgan Stanley analysts say that home shoppers need to have more access to credit in order to finance their home purchases to keep the housing recovery strong. A tight lending environment has kept many would-be buyers out.

"Recent actions by the Federal Reserve, the commitment to keep interest rates lower for longer as well as the launch of an open-ended QE3, convince us that this low mortgage rate environment and the demand response for housing are likely to prevail for an extended period — well into the future," the Morgan Stanley analysts conclude.

Source: “Morgan Stanley Declares Housing Out of the Woods,” HousingWire

Filed Under: Blog, Economy, Housing Market, real estate financing, Real Estate Updates Tagged With: bellevue real estate, housing market, issaquah real estate, redmond real estate, sammamish real estate

Home Ownership Rate Stands at 65.5%

October 1, 2012 By EmmanuelFonte Leave a Comment

Americans still favor home ownership. The U.S. homeownership rate continues to remain around 65.5 percent, the U.S. Census Bureau reported late last week. The home ownership rate is nearly the same as it was in the second quarter of 2011 at 65.9 percent.

The Census Bureau also reported that vacancy rates for housing were 2.1 percent and vacancy rates for renting were 8.6 percent in the second quarter.

The home ownership rate peaked at 69.2 percent in 2004. Home owners outnumber renters in nearly 100 percent of the nation’s 3,095 counties evaluated by the Census.

Keweenaw County, located in Michigan’s Upper Peninsula, posted one of the best home ownership rates: 89.8 percent.

Source: “National Home Ownership Rate Is Pegged at 65 Percent,” The Business Journals

Filed Under: Blog, Housing Market, real estate financing, Real Estate Updates Tagged With: bellevue real estate, home-ownership, issaquah real estate, redmond real estate, sammamish real estate

Renting ‘Round the U.S.

October 1, 2012 By EmmanuelFonte Leave a Comment

click for a larger view

Filed Under: Blog, Real Estate Updates

House Prices: Experts Becoming More Optimistic

October 1, 2012 By EmmanuelFonte Leave a Comment

Each quarter, Pulsenomics surveys a

“distinguished panel of over 100 economists, investment strategists, and housing market analysts regarding their 4-year expectations for future home prices in the United States.”

Here are the latest survey results.

Price appreciation/depreciation expected over the next four years: